Correlation Between KONE Oyj and Spinnova
Can any of the company-specific risk be diversified away by investing in both KONE Oyj and Spinnova at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KONE Oyj and Spinnova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KONE Oyj and Spinnova Oy, you can compare the effects of market volatilities on KONE Oyj and Spinnova and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KONE Oyj with a short position of Spinnova. Check out your portfolio center. Please also check ongoing floating volatility patterns of KONE Oyj and Spinnova.
Diversification Opportunities for KONE Oyj and Spinnova
Average diversification
The 3 months correlation between KONE and Spinnova is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding KONE Oyj and Spinnova Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spinnova Oy and KONE Oyj is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KONE Oyj are associated (or correlated) with Spinnova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spinnova Oy has no effect on the direction of KONE Oyj i.e., KONE Oyj and Spinnova go up and down completely randomly.
Pair Corralation between KONE Oyj and Spinnova
Assuming the 90 days trading horizon KONE Oyj is expected to generate 0.36 times more return on investment than Spinnova. However, KONE Oyj is 2.77 times less risky than Spinnova. It trades about -0.22 of its potential returns per unit of risk. Spinnova Oy is currently generating about -0.6 per unit of risk. If you would invest 5,180 in KONE Oyj on August 24, 2024 and sell it today you would lose (331.00) from holding KONE Oyj or give up 6.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KONE Oyj vs. Spinnova Oy
Performance |
| Timeline |
| KONE Oyj |
| Spinnova Oy |
KONE Oyj and Spinnova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KONE Oyj and Spinnova
The main advantage of trading using opposite KONE Oyj and Spinnova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KONE Oyj position performs unexpectedly, Spinnova can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Spinnova will offset losses from the drop in Spinnova's long position.| KONE Oyj vs. Sampo Oyj A | KONE Oyj vs. Fortum Oyj | KONE Oyj vs. UPM Kymmene Oyj | KONE Oyj vs. Neste Oil Oyj |
| Spinnova vs. Qt Group Oyj | Spinnova vs. Harvia Oyj | Spinnova vs. Nordea Bank Abp | Spinnova vs. Sampo Oyj A |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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